British private bank Arbuthnot Latham reported a marginal increase in pre-tax profit steady in 2012 to £2.1m ($3.1m), up from £2m in 2011.
Operating expenses increased 12% to £17.9m, mostly attributable to the hires of executives, the bank said.
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In line with the bank’s stated policy of being entirely funded from retail deposits, the customer deposit balances grew by 17% over the year, from £421.7m to £495.7 m.
Customer loans also increased by 21% to £289.3m.
This brings the loan to deposit ratio to 59% from 57% in 2011, a figure which is below the bank’s target range for this period of economic cycle.
The year was marked by the launch of the Funding for Lending Scheme (FLS) in Q3, which led to a compression of margins in the business.
Arbuthnot Latham says this tendency should reverse in the first half of 2013 as some existing deposits begin to mature.
Ambitious in an unpredictable future
Arbuthnot Latham’s hiring drive to help the bank develop its wealth management business for clients in the UK and overseas under CEO James Fleming appears to be bearing fruit.
Arbuthnot Latham boosted its assets under management 20% in 2012, from £315m to £377m.
Gilliat Financial Solutions, the structured product distribution business, saw revenues grow by 73% and pre-tax profit increased to £0.6m (£0.2m in 2011).
The business also managed to complete its first overseas sale, as it looks to develop its offshore distribution channels.
